Perfect 10, Inc. v. CCBill LLC
2007 WL 1557475, 2007 U.S. App. LEXIS 12508, 488 F.3d 1102 (2007)
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Rule of Law:
The 'intellectual property' exception to the broad immunity granted by the Communications Decency Act (CDA) under 47 U.S.C. § 230(e)(2) applies only to federal intellectual property laws, not state-law claims. Therefore, interactive computer service providers are immune from liability for state-law claims like right of publicity, unfair competition, and false advertising based on third-party content.
Facts:
- Perfect 10 publishes an adult entertainment magazine and operates a subscription website, for which it has created approximately 5,000 copyrighted images.
- Perfect 10 holds registered copyrights and trademarks for its images and brand, and many of the models in its images have assigned their rights of publicity to Perfect 10.
- CWIE provides webhosting and internet connectivity services to website owners.
- CCBill provides payment processing services, allowing consumers to use credit cards or checks to pay for subscriptions to e-commerce websites.
- Websites that were clients of CWIE and CCBill posted images that Perfect 10 alleges were stolen from its magazine and website.
- Beginning in August 2001, Perfect 10 sent letters and emails to CCBill and CWIE stating that their clients were infringing Perfect 10's copyrights and other intellectual property rights.
Procedural Posture:
- Perfect 10 sued CCBill and CWIE in the U.S. District Court for the Central District of California, alleging federal copyright and trademark infringement, as well as state-law claims for violation of right of publicity, unfair competition, and false advertising.
- The district court granted summary judgment in favor of CCBill and CWIE on the state law unfair competition and false advertising claims, finding they were immune under the Communications Decency Act (CDA).
- The district court denied summary judgment on the state law right of publicity claims, holding that the CDA did not provide immunity for this specific claim.
- The district court also found that CCBill and CWIE qualified for certain 'safe harbor' protections from copyright infringement liability under the Digital Millennium Copyright Act (DMCA).
- Perfect 10, as appellant, appealed the district court's adverse summary judgment rulings on the CDA and DMCA issues to the U.S. Court of Appeals for the Ninth Circuit.
- CCBill and CWIE, as cross-appellants, appealed the district court's denial of CDA immunity for the right of publicity claim.
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Issue:
Does the Communications Decency Act (CDA), 47 U.S.C. § 230, provide immunity to interactive computer service providers against state-law intellectual property claims, such as the right of publicity?
Opinions:
Majority - Milan D. Smith, Jr.
Yes. The Communications Decency Act provides immunity against state-law intellectual property claims. The Act’s exception for laws 'pertaining to intellectual property' under § 230(e)(2) is construed to mean only federal intellectual property law. Congress did not define 'intellectual property' in the statute, and allowing the varying definitions from numerous state laws to control would undermine the CDA's goal of providing a uniform, broad federal immunity to encourage the development of the internet. Subjecting service providers to a patchwork of state laws would create uncertainty and litigation costs, fatally undermining the immunity Congress intended to grant. The court also held that to qualify for DMCA safe harbors, a service provider's policy against repeat infringers must be reasonably implemented, which requires assessing the provider's response to all infringement notices, not just the plaintiff's. However, the court found that Perfect 10's own notices were deficient because they were cobbled together from multiple documents and lacked the required statement under penalty of perjury, thus failing to provide the knowledge required to trigger a duty to act.
Analysis:
This decision significantly narrows the 'intellectual property' exception to CDA § 230 immunity, clarifying that it applies only to federal claims like copyright and patent law. By excluding state-law IP claims (e.g., right of publicity, unfair competition), the ruling strengthens the protective shield for internet service providers against liability for user-generated content. This interpretation promotes a uniform national standard for CDA immunity, forcing plaintiffs with state-law IP grievances to sue the content creators directly, rather than the platforms hosting the content. The opinion also provides important guidance on the practical requirements for copyright holders to provide effective takedown notices under the DMCA.
